q3 2019 - mayberry investments limited

Investing in Jamaica Land We Love

Q3 2019UNAUDITED FINANCIAL RESULTS

Q 3 2 0 1 9 P E R F O R M A N C E H I G H L I G H T S2 0 1 9 P E R F O R M A N C E H I G H L I G H T S

CHAIRMAN’S COMMENTARY ON FINANCIAL RESULTSFOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2019.(represented in J$)

J$4.8BYTD TOTAL COMPREHENSIVE INCOME

ATTRIBUTABLE TO SHAREHOLDERS

86%INCREASE IN EARNINGS PER SHARE QUARTER OVER QUARTER

J$0.39Q3 2019 EARNINGS PER SHARE

10% INCREASE IN NET ASSET VALUE (N.A.V.) ( QUARTER OVER QUARTER)

54% INCREASE IN DIVIDEND INCOME (QUARTER OVER QUARTER)


The Board of Directors of the company is pleased to share its Unaudited 3rd Quarter 2019 financial results for the months July – September 2019.

NET ASSET VALUE (NAV)Net Book Value per share moved to J$14.34, a 10.2% increase over the corresponding period in 2018, due to an increase in Equity Investments of J$1.7B. This represents a balance of J$18.7B as at September 30, 2019, compared to the value of J$17B at the end of the September 2018. Additionally, the NAV increased by 32% when compared to December 2018.

Portfolio Information

TEN LARGEST HOLDINGS (VALUE OF SHARES)

STOCKPercent of Total Value of

InvestmentsSUPREME VENTURES LIMITED 53.55%LASCO FINANCIAL SERVICES LIMITED 6.31%CARIBBEAN CEMENT COMPANY LTD 5.96%CARIBBEAN PRODUCERS JAMAICA LIMITED 5.30%BLUE POWER GROUP LIMITED 5.22%DERRIMON TRADING COMPANY LIMITED 5.16%JAMAICA BROILERS GROUP LIMITED 3.84%JMMB GROUP LIMITED 2.08%WIGTON WIND FARM 2.03%LASCO DISTRIBUTORS LIMITED 1.46%


PORTFOLIO HIGHLIGHTSMayberry Jamaican Equities Limited (MJE) continues to invest in key Jamaican stocks. During this quarter, MJE purchased shares in Derrimon Trading Company Limited resulting in the company being the second largest shareholder, with approximately 410M shares in hand. In addition, MJE acquired 348M shares in Wigton Windfarm in Q3 2019, which led to this stock being the ninth top shareholding in our portfolio.

Total purchases for the quarter under review amounted to J$1.474 billion whereas Total Sales were valued at J$1.469 billion, making MJE a net purchaser of stocks for this period.

The other stocks which were the top contributors to our portfolio value for the reporting period, were Blue Power Limited, Wigton Windfarm Limited and Fontana Limited, whose stock prices rose by 80%, 10% and 76%, respectively. The company currently holds stock in 30 companies listed on the Main and Junior Markets of the JSE.

DIVIDEND INCOMEFor the quarter ended September 30, 2019, MJE reported Dividend Income of J$107M, representing a significant increase of 54% over the corresponding quarter in 2018. The most solid contributor to the portfolio’s dividend revenue line was Supreme Ventures Limited with dividends of J$88M.

INVESTMENT ENVIRONMENTJamaica’s fiscal performance was supported by the continuance of low market interest rates with the Bank of Jamaica’s policy interest rate at 0.50% at the end of Q3 2019. Net International Reserves were at US$3.1B at the end of September 2019 and the latest unemployment rate reported was 7.8%. Jamaica’s annual point-to-point inflation was 3.4% compared to 4.3% for Q3 2018.

The Jamaica Stock Exchange (JSE) Main Market Index at the end of September 2019 grew by 157,722 points or 44% up from 358,320 points, when compared to September 2018. The JSE Junior Market also grew by 138 points or 4% year-over-year to 3,533 points. Both markets continue to reflect increased activity.



FINANCIAL POSITION

Total assets grew to J$19.8B for the 3rd quarter of 2019 compared to $18.4B for the comparative quarter 2018. This represents a J$1.4B or 7.7% increase in our asset base due mainly to increased value of quoted equities, particularly, Wigton Windfarm Limited, Derrimon Trading Company Limited, Lasco Financial Services Limited, Jamaica Broilers Group Limited, General Accident Insurance Company Jamaica Limited, Lasco Manufacturing Limited, Honey Bun Limited, Jamaica Teas Limited, Jamaica Money Market Brokers Limited and Supreme Ventures Limited.

For the 3rd quarter in 2019, Total Liabilities decreased by J$173.8M or 6.2% to J$2.6B. This resulted primarily from reductions in Interest Payable and Accounts Payables which was further offset by an increase in Deferred Tax.

SHAREHOLDERS’ EQUITYMayberry Jamaican Equities’ capital base continues to appreciate and this is attributable to higher investment revaluation reserves, with Retained Earnings moving from J$5.6B to J$6.4B, year-over-year. Fair Value Reserves of J$9.4B, moved up from J$8.6B when compared to September 2018.

OVERALL PERFORMANCEWith overall lower expenses, the company reported profits of J$464.1M or 86% higher than Q3 2018 results. For the accumulated nine-month period ended September 30, 2019, MJE reported Net Profit of J$424.7M. This resulted in Earnings per share (EPS) of J$0.39 and represented an increase of J$0.18 over the same period in 2018. This was mainly due to the revaluation of the equities classified as Fair Value through Profit or Loss (FVPL).

DescriptionQuarter ended 30 September 2019

(J$'000)

Quarter ended 30 September 2018

(J$'000)Change (J$'000) % Change

Total Assets 19,844,214 18,425,726 1,418,489 7.7%Total Liabilities 2,624,235 2,798,057 173,822 6.2%Stockholders' Equity 17,219,980 15,627,669 1,592,311 10.2%Net Book Value Per Share $14.34 $13.01 $1.33 10.2%

SUMMARY OF CHANGES ON THE STATEMENT OF FINANCIAL POSITION


TOTAL COMPREHENSIVE INCOME

For Q3 2019, total comprehensive income amounted to (J$185.2M), compared to J$4.2B for the corresponding quarter of 2018; a decline of J$4.4B or 104.4%. This was due to a decrease in the Equity Reserve, resulting from price movements for stocks held in the current portfolio, in particular, Supreme Ventures Ltd.

OPERATING EXPENSESTotal Operating expenses decreased by J$255.2M or 65.5% when compared to the corresponding quarter in 2018 due to lower administrative expenses and reduced incentive and management fees for Investment management services.

Mayberry Jamaican Equities Limited takes this opportunity to thank all our shareholders and Board of Directors for your trust and support.

Christopher BerryChairman

DescriptionQuarter ended 30 September 2019

(J$'000)

Quarter ended 30 September 2018

(J$'000)Change (J$'000) % Change

Net Interest Income and Other Revenues 609,422 657,795 (48,373) -7.4%Operating Expenses 134,418 389,642 255,225 65.5%Profit before Taxation 475,005 268,153 206,852 77.1%Net Profit 464,113 249,505 214,607 86.0%Other Comprehensive Income -649,409 3,996,268 (4,645,678) -116.3%Total Comprehensive Income -185,297 4,245,774 (4,431,071) -104.4%

Earnings Per Share 0.39 0.21 0.18 86.0%

SUMMARY OF CHANGES ON THE STATEMENT OF COMPREHENSIVE INCOME


BASIS OF PREPARATION

These consolidated financial statements have been prepared in accordance with the accountingpolicies as set out in note 2 of the audited financial statements for the year ended 31 December 2018.

STATEMENT OF PROFIT OR LOSSFOR THE PERIOD ENDED SEPTEMBER 30, 2019STATEMENT OF PROFIT OR LOSSFOR THE PERIOD ENDED SEPTEMBER 30, 2019

UNAUDITED UNAUDITED UNAUDITED UNAUDITED AUDITED

3 Months ended 30 3 Months ended 30 9 Months ended 30 9 Months ended 30 12 Months ended

31 DECEMBER September 2019 September 2018 September 2019 September 2018 2018

J$'000 J$'000 J$'000 J$'000 J$'000 Net Interest Income and Other Revenues

Interest income 3,031 575 18,062 1,525 (9,406) Interest expense (40,166) (21,232) (128,096) (62,857) (92,259) Net Interest income (37,135) (20,657) (110,034) (61,331) (101,665)

Dividend Income 107,072 69,472 281,576 295,775 349,289 Net Trading Gains/(Losses) 23,451 (2,706) 54,131 (2,840) (10,220) Realised Gain on disposal of Associates - - - - (2,920) Unrealised (loss)/gain on investment revaluation 488,211 615,735 542,114 1,033,854 369,064 Net Foreign Exchange Gain / (Loss) 27,823 (4,050) 68,107 (5,836) (57,468)

609,422 657,795 835,894 1,259,622 546,080

Operating Expenses: Provision for Dyoll sharesOther operating expenses 134,418 389,642 404,319 547,528 449,972

134,418 389,642 404,319 547,528 449,972

Share of Profits in Associate - - - - - Operating profit/(loss) before Asset tax 475,005 268,153 431,575 712,094 (5,557)

Asset Tax - - - - - Profit/(Loss) before Taxation 475,005 268,153 431,575 712,094 96,108

Taxation (charge) / credit (10,892) (18,648) (6,885) (21,901) 7,406 NET PROFIT 464,113 249,505 424,690 690,192 103,514

OTHER COMPREHENSIVE INCOME

Financial Reserve (649,409) 3,996,268 4,392,284 6,068,569 3,507,666

Other Comprehensive Income, Net of Tax (649,409) 3,996,268 4,392,284 6,068,569 3,507,666

TOTAL COMPREHENSIVE INCOME (185,297) 4,245,774 4,816,974 6,758,762 3,611,180

Number of Shares in issue 1,201,149 1,201,149 1,201,149 1,201,149 1,145,269Earnings per share 0.39 0.21 0.35 0.57 0.09


STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2019 UNAUDITED

SEPTEMBER 30, 2019 UNAUDITED

SEPTEMBER 30, 2018 AUDITED

DECEMBER 31, 2018

ASSETS J$'000 J$'000 J$'000CASH AND CASH EQUIVALENTS 257,713 1,370,081 238,685

INVESTMENTS 18,675,493 16,951,127 13,952,337

PREPAYMENT 22,741 - -

TAXATION RECOVERABLE (3,905) - 2,507 -

DUE FROM PARENT COMPANY 796,864 391 725,027

INTANGIBLE ASSET 57,915 - 34,744

OTHER RECEIVABLES 37,393 104,127 94,349

TOTAL ASSETS 19,844,214 18,425,726 15,047,648

LIABILITIES AND EQUITYLIABILITIESDUE TO PARENT COMPANY - - -

DEFERRED TAX 97,326 96,469 62,298

INTEREST PAYABLE 2,414 6,472 4,091

LOANS - - -

ACCOUNTS PAYABLES 341,486 476,042 318,255

DEBT SECURITY IN ISSUE 2,183,009 2,200,000 2,183,009

TAXATION PAYABLE - 19,074 -

TOTAL LIABILITIES 2,624,235 2,798,057 2,567,652

STOCKHOLDERS EQUITYSHARE CAPITAL 1,468,027 1,468,027 1,468,027

PREFERENCE SHARES 135 135 135

FAIR VALUE RESERVE 9,376,452 8,573,539 5,955,575

RETAINED EARNINGS 6,375,366 5,585,968 5,056,259 TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS 17,219,980 15,627,669 12,479,996

NON-CONTROLLING INTERESTS - 10% - -

TOTAL STOCKHOLDERS' EQUITY 17,219,980 15,627,669 12,479,996

TOTAL STOCKHOLDERS' EQUITY AND LIABILITIES 19,844,215 18,425,726 15,047,648

Net book Value per Stock Unit $14.34 $13.01 $10.90

Approved by the Board of Directors for issue on 17th October, 2019 and signed on its behalf by:

Christopher BerryChairman

Mark Berry Director

STATEMENT OF FINANCIAL POSITIONAS AT SEPTEMBER 30, 2019


STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIOD ENDED SEPTEMBER 30, 2019

UNAUDITED UNAUDITED UNAUDITED UNAUDITED AUDITED

3 Months ended 30 3 Months ended 30 9 Months ended 30 9 Months ended 30September 2019 September 2018 September 2019 September 2018

J$'000 J$'000 J$'000 J$'000 J$'000

Profit/Loss for the period 464,113 249,505 424,690 690,192 103,514

Other Comprehensive Incomefor the period net of tax:Items that will or maybe classified to statement of incomeUnrealised gains/ (losses)on financial instruments (649,409) 3,996,268 4,392,284 6,068,569 3,507,666 Total Comprehensive income attributable to stockholders (185,297) 4,245,774 4,816,974 6,758,762 3,611,180

12 Months ended 31 DECEMBER 2018

STATEMENT OF COMPREHENSIVE INCOMEFOR THE PERIOD ENDED SEPTEMBER 30, 2019


STATEMENT OF CHANGES IN EQUITYAS AT SEPTEMBER 30, 2019

SHARE CAPITALFAIR VALUE RESERVES

RETAINED EARNINGS

NON-CONTOLLING INTERESTS TOTAL

$'000 $'000 $'000 $'000 $'000

Balance at January 1, 2018 1,468,027 2,929,230 4,471,515 - 8,868,772

Realised gains / (losses) on fair value instruments transferred to retained earnings - (424,260) 424,260 - - Preference Shares 135 135 Ordinary dividends paid - in specie - - - - - Net Profit - - 690,192 - 690,192 Total comprehensive income - 6,068,569 - - 6,068,569 Translation adjustment - - 0 - 0

Balance at September 30, 2018 1,468,162 8,573,539 5,585,968 - 15,627,669

Balance at January 1, 2019 1,468,162 5,955,575 5,056,259 - 12,479,996 Realised gains / (losses) on fair value instruments transferred to retained earnings - (971,407) 971,407 - Ordinary dividends paid - - (76,990) (76,990) Preference Shares - - Net Profit - - 424,690 424,690 Total comprehensive income - 4,392,284 - 4,392,284 Translation adjustment - - - Balance at September 30, 2019 1,468,163 9,376,452 6,375,366 - 17,219,981

STATEMENT OF CHANGES IN EQUITYAS AT SEPTEMBER 30, 2019


STATEMENT OF CASH FLOW FOR THE PERIOD ENDED SEPTEMBER 30, 2019

UNAUDITED UNAUDITED AUDITED9 Months ended 30 9 Months ended 30 12 Months ended 31

September 2019 September 2018 December 2018J$'000 J$'000 J$'000

Cash Flows from Operating Activities

Profit before taxation 431,575 712,094 96,108 Adjustments to reconcile profit to net cash used in operating activities: Interest Income (18,062) 2,079 (2,765) Interest Expense 128,096 47,081 92,259

Realized Fair Value gains transferred to Retained Earnings 971,407 424,260 481,230 Unrealized fair value (gain)/loss on financial instruments - FVPL - - (369,064) Unrealized Foreign Exchange Gains (66,253) 5,836 113,136 Adjusted Profit / (Loss) 1,446,763 1,191,350 410,904

Changes in operating assets and liabilities:Decrease / (increase) in Investment securities (1,302,279) (7,680,554) (1,296,843) Unrealized Foreign Exchange Gains 66,253 - - Decrease / (increase) in Investment Revaluation - 5,644,309 - Adjustment for Unrealized F/X - (5,836) - Decrease / (increase) in Other Receivables 63,367 81,797 77,148 Decrease / (increase) in Accounts Payables & Other Liabilities 58,259 304,434 63,624 Loans 2,200,000 -

Prepayments (22,741) Decrease / (increase) in Related companies (71,837) (498,228) (1,231,585)

237,785 1,237,272 (1,976,753)

Interest received 18,062 1,536 4,346 Interest Paid (129,773) (41,419) (88,992) Taxation paid (6,885) (21,901) - Cash (used in)/generated from Operating Activities 119,189 1,175,488 (2,061,398)

Cash Flows from Investing ActivitiesPurchase of intangible asset (23,171) - (34,744) Dividend received from Associate - - - Cash (used in)/generated from Investing Activities (23,171) - (34,744)

Cash Flows from Financing ActivitiesPreference share capital issued - - 127 Proceeds from issue of debt security - - 2,136,092

Dividends Paid (76,990) - - Share capital -redeemable preference shares - 135 - Cash generated from/(used in) Financing Activities (76,990) 135 2,136,219

Increase in Cash and Cash Equivalents 19,028 1,175,623 40,077 Exchange gain/(loss) on foreign Cash & Cash Equivalents 891

Cash & Cash Equivalents - Beginning of the year 238,685 194,458 197,717

Cash & Cash Equivalents - End of the year 257,713 1,370,081 238,685

STATEMENT OF CASH FLOWFOR THE PERIOD ENDED SEPTEMBER 30, 2019


Names Shareholdings

MAYBERRY INVESTMENTS LIMITED 858,445,774 PWL BAMBOO HOLDINGS LIMITED 66,758,290MAYBERRY ASSET MANAGERS LIMITED 57,622,865K. MARK BERRY 47,375,594MANWEI INTERNATIONAL LIMITED 40,251,196VICTORY ISLAND LIMITED 10,000,000SAGICOR SELECT FUNDS LIMITED - CLASS B - FINANCIAL 6,482,385KONRAD LIMITED 6,432,031MAYBERRY INVESTMENTS LTD. PENSION SCHEME 5,041,490APEX PHARMACY 4,817,068

A+ MEDICAL CENTRE 641,141 MAYBERRY FOUNDATION 2,254,868

MAYBERRY JAMAICAN EQUITIES LTD.TOP TEN SHAREHOLDERSAS AT SEPTEMBER 30, 2019

CONNECTED PARTIES

MAYBERRY JAMAICAN EQUITIES LTD.TOP TEN SHAREHOLDERSAS AT SEPTEMBER 30, 2019


Directors Shareholdings Connected PersonsChristopher Berry - 75,948,157 Konrad Berry 47,375,594 7,351,589Natalie Augustin 253,300 -

Shareholdings of Directors and Senior ManagementAS AT SEPTEMBER 30, 2019MAYBERRY JAMAICAN EQUITIES LTD.

Shareholdings of Directors and Senior ManagementAS AT SEPTEMBER 30, 2019

q3 2019 - mayberry investments limited

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